Toshiba flips back towards Western Digital group for chip unit sale

Japan's embattled Toshiba Corp (6502.T) has chosen a group led by USA private equity firm Bain Capital to buy its prized memory chip unit, three people with knowledge of the talks said on Wednesday, a last-minute dramatic twist to a highly contentious auction.

According to news reports earlier in the day, Toshiba's board of directors made a decision to sell its chip-making unit to the consortium for about 2.4 trillion yen (US$21 billion).

Toshiba Corp is shifting back toward selling its prized semiconductor unit to a group backed by joint venture partner Western Digital Corp, people familiar with the deal said.

However that deal appears to have broken down as Western Digital failed to agree on limits to its future stake in the chip business demanded by Toshiba.

"Toshiba is expected to make an official announcement soon but it is unlikely to be more than repeating its current stance that it is continuing talks with Bain and SK hynix", an SK hynix spokesperson said. Bain Capital did not immediately respond to a request for comment. -South Korean consortium for around 2.4 trillion yen ($21 billion) following months of talks involving other bidders, sources close to the matter said Wednesday.